Limitless (13 page)

After that, I took another cab back to Tenth Street and got settled
down to work again. In my absence, the stocks I was holding had increased dramatically in value, bringing my base capital up to $50,000. This meant that with Gennady’s contribution I now had almost $150,000 at my disposal, and with only a couple of hours’ trading time left – and consequently very little time for research – I just jumped right into it, tracking valuations, schlepping stocks around, buying, selling, sprinting back and forth across the various rows of figures on the computer screens.

This process gathered considerable momentum and peaked late in the afternoon with two big scores – let’s call them Y and Z –
high-risk,
high-yield stocks, each on a rapid upswing. Y carried me as far as the $200,000 mark, and Z carried me considerably beyond it, to just over a quarter of a million. It was a tense, sometimes harrowing few hours, but it gave me a real taste for the thrill of facing down the odds, and also for large quantities of adrenalin, a substance I could almost feel being secreted into, and moving through, my system – almost the way share prices themselves shifted and moved through the markets.

Despite my success rate, however, or maybe because of it, a sense of dissatisfaction began to creep over me. I had the feeling that I could be doing a lot more than just trading at home on my PC, and that being a guerrilla market-maker wasn’t going to be anywhere near enough to keep me happy. The fact is, I wanted to know what it would be like to trade from the inside, and at the highest levels … what it would be like and how it would feel to buy
millions
of shares at a time …

I phoned Kevin Doyle, therefore – the investment banker I’d gone for breakfast with a few Sundays before – and arranged to meet him for drinks at the Orpheus Room.

The last time we met he’d been very intent on giving me advice about setting up a portfolio of stocks, so I thought I could maybe pick his brains a little and get some tips on how to move into the big league.

Kevin didn’t recognize me at first when he arrived at the bar. He said I’d changed and was considerably slimmer than when we’d met at Herb and Jilly’s.

He wanted to know where I worked out.

I looked at him for a moment.
Herb and Jilly’s?
Then I realized that whoever Herb and Jilly were, it must have been at their place on the Upper West Side that I’d ended up that night.

‘I don’t work out,’ I said. ‘Working out is the new lunch, it’s for wimps.’

He laughed, and then ordered an Absolut on the rocks.

Kevin Doyle was around forty, forty-two, and fairly trim himself. He was wearing a charcoal suit and a red silk tie. I couldn’t remember much of what I’d told him at Herb and Jilly’s, or afterwards in that diner on Amsterdam Avenue, but one thing I did remember clearly was that
I’d
done most of the talking, and Kevin – apart from trying to turn me on to some stock tips – had hung on my every word. It’d been that thing again, that wanting-to-impress-me,
wanting-to-be-my-best-friend
thing that I’d had with Paul Baxter and Artie Meltzer. I tried to analyse what this was, and could only conclude that maybe a combination of my being enthusiastic and non-judgemental –
noncompetitive
– might have struck some kind of a chord in people, especially in people who were stressed out and on their guard all the time. At any rate, these days I had the talking thing a bit more under control, so I decided to let Kevin take the lead. I asked him about Van Loon and Associates.

‘We’re a small investment bank,’ he began, ‘about two hundred and fifty employees. We do venture capital, fund management, real estate, that kind of thing. We’ve brokered some fairly big
entertainment
deals recently. We did the MCL-Parnassus purchase of Cableplex last year, and Carl Van Loon himself is currently in talks about something else to Hank Atwood, the Chairman of MCL.’ He paused, and then added, as though telling me he’d just been picked for the soccer team, ‘I’m a managing director.’

But when he elaborated on this a bit, explaining that he was one of seven or eight managing directors in the company who babysat their own deals and then came out with huge commissions, I
realized
for the first time that Kevin wasn’t just some Wall Street schmoe. From what he was telling me, I quickly reckoned that he probably cleared about two or three million a year.

Now
I
was impressed.

‘What about Van Loon? Is he …’ I asked, not even having a real question here, obviously succumbing a little to the magnetic pull of celebrity that still surrounded Kevin’s boss.

‘Carl’s all right. He’s mellowed a lot, you know. Over the years. But he still works as hard as ever.’

I nodded, thinking
How hard could that be?

‘The firm wouldn’t be what it is today without him.’

This was a man who probably cleared about two or three million a
week
.

‘Hhn.’

‘So … how have
you
been?’

‘Me? Fine.’

I didn’t remember much of our previous encounter, but I was pretty sure I’d mentioned my book, and probably without saying that it was part of a cheesy series for a second-rate publisher – so, at least as far as I knew, Kevin thought I was a writer of some kind, a commentator, someone with their finger, so to speak, on the pulse of the
Zeitgeist
… someone he could have an intelligent,
self-congratulatory
but non-threatening conversation with, and about stuff like the new economy and megatrends and digitalization.

But I got to the point fairly fast.

‘What do you make of all this electronic day-trading, Kevin?’

He thought for a second. ‘It’s just noise. These guys aren’t
speculators
, or even investors, they’re
gamblers
– or else sorry geeks who think they’ve democtratized the markets.’ He made a face. ‘When this bubble pops, let me tell you, there’s going to be a lot of blood spattered on the walls.’

He took a sip from his drink.

I lifted my glass. ‘I’ve been doing it at home on my PC, using a software trading package I bought on Forty-seventh Street. I’m up about a quarter of a million in two days.’

Kevin looked at me in horror for a few seconds, taking in the information. But he was also confused, and obviously didn’t know what to say. Then it registered.

‘
A quarter of a million?’

‘Hmm.’

‘
In two days?
That’s pretty good.’

‘Yeah, I think so. But I find I’m weirdly – how can I put this? –
dissatisfied
with it. I feel constricted. I need to expand.’

As he tried to come to terms with what I was telling him, Kevin shifted on his stool and maybe even squirmed a little. He was a confident guy, clearly very successful, and it was odd to see him mired in uncertainty like this.

‘Ehm … perhaps …’ he scratched his nose, ‘you could … why don’t you try one of those day-trading firms?’

I asked him what difference that would make.

‘Well, you’re not isolated, you’re in a room with a bunch of other traders and on the principle that no one in an environment like that wants to see anyone else
failing
, you help each other out, and share information. Most firms also offer high leverage, anywhere between five to ten times your deposit. You get a better feel for the
behaviour
of the markets, as well,’ – he was getting back into his stride here – ‘because it’s often just a question of being able to gauge the collective mood, and then deciding either to go
with
it or … I don’t know’ – he shrugged his shoulders – ‘
against
it.’

I asked him if he could recommend one of these places.

‘There are a couple of good ones I’ve heard about – actually on, or at least around, Wall Street itself. Though if you ask me, Eddie, it sounds like you’re doing pretty good on your own.’

I wrote down the names he reeled off and thanked him anyway. Then we each took sips from our respective glasses.

‘So … a quarter of a million in two days.’ He whistled in
admiration
. ‘What’s your strategy?’

I was about to give him an edited version of events when two guys in suits came up behind us and one of them slapped Kevin on the back. ‘Hey Doyle, you old dog, what’s happening?’

These were money-scented financial-sector jocks, and when Kevin introduced me but didn’t say that I was a managing director or an executive vice-president with this or that outfit, they more or less ignored me. During the ensuing conversation about the emerging markets of Latin America, and then about the tech stocks bubble, I
could see Kevin struggling with his fear that I was going to start talking again about
day-trading on a PC
– and in front of these guys. So when I stood up to go, I think he was a little relieved.

I told him I’d phone him in a few days’ time and let him know how I’d gotten on with
that thing
we’d been discussing.

Lafayette Trading was on Broad Street, just a few blocks down from the New York Stock Exchange. In the main room of a sparsely furnished suite of offices on the fourth floor, twenty tables were arranged in a large rectangle. Each table held enough terminals and PCs for at least three traders, and of the fifty or so traders I saw there on my first morning – all male, each seated in comfortable executive-style chairs – I’d say more than half of them were under thirty years old, and of those about half again were wearing jeans and baseball caps.

The deal was that you put down a minimum deposit of $25,000 and Lafayette then provided all the hardware and software you needed in order to trade. In return for this, they charged a
commission
of two cents a share on each trade you made. If you wanted it, and most people did, they also offered pretty high leverage on your deposit. I registered with them, paying a deposit of $200,000 and then arranged to leverage myself to two and a half times that amount – which meant, effectively, that I was starting off this new phase of my trading career with half a million dollars at my disposal.

I had to do a short induction course in the morning. Then I spent most of the early afternoon chatting to some of the other traders and more or less observing the room. The atmosphere at Lafayette was – as Kevin had said it might be in such a place – friendly and collaborative. There was a sense of us all being in this together, of us all working against the big marketmakers down the street. But it didn’t take long to see that there were factions in the room, and some big personalities, and that the dynamics weren’t always going to be so easy to read. There were different trading styles, as well, of course. The guy to my left, for example, was a manic keyboard-crusher who didn’t seem to do any research or analysis.

‘What’s that stock?’ I asked him, pointing to a symbol on his screen soon after I’d sat down.

‘No idea,’ he mumbled, not taking his eyes off what he was doing, ‘it has a big spread and it’s moving, and that’s all I need to know.’

Other traders seemed more cautious and did quite a lot of research – by watching the TV sets bolted to the side-wall, or by running from their tables to a Bloomberg terminal at the top of the room, or just by poring over endless stock graphs on their own screens. In any case, when I felt I had the measure of the room, and its mood, I went to work at my allotted table-space, looking for some likely trades myself. But as it was my first day I took it fairly easy and when I closed out my positions before the final bell I was only about $5,000 up. Given my admittedly short track record, this didn’t seem like all that much to me, but some of the other traders didn’t agree. Clearly, as the new kid on the block, I had already aroused a certain amount of curiosity, not to say suspicion, in the room. Someone asked me rather tentatively if I wanted to join a group of them who were going for a drink to some place down at Pier 17 Pavilion, but I declined. I didn’t want to form any new alliances just yet.

It had been a relatively slow day for me – at least in terms of mental activity and the amount of work I’d done – so when I got home I was feeling pretty restless, even a little frenzied. Unable to sleep that night, I stayed on the couch in the living-room, watching TV and reading. Against a background of cable movies, quiz shows and commercials, I ploughed through the financial sections of the day’s papers, a biography of Warren Buffet and all the text, captions, advertising copy, mastheads and photo credits of half a dozen glossy business magazines.

On my second morning at Lafayette, a Tuesday, I spent a good deal of time nosing around the various financial websites. I eventually opened up more than a dozen major positions, eighty thousand shares in total, and then concentrated on tracking them carefully.

At about eleven-thirty, there was a slight commotion to my left. A few tables up, three of the guys in baseball caps, who appeared to be working very closely together, started punching the air and
hissing yessss to each other. It took another few minutes for the ‘tip’ to filter down. The keyboard-cruncher beside me, whose name was Jay, pulled himself away from his screen for a brief moment and turned to face me.

‘Think something’s just come through on the wire about some biotech stock.’

He shrugged his shoulders and then went back to work, but the guy beside
him
wheeled his chair around and spoke to me as though we’d known each other since high school.

‘Medical breakthrough, hasn’t been announced yet. MEDX – that’s Mediflux Inc., a Florida drug company, yeah? – seems they’ve got some anti-cancer protein in development. It’s got the white-coats over at the National Cancer Research Foundation all excited.’

‘And?’

He looked at me as if to say,
What – are you a moron?
Then, pausing uncertainly, he said, ‘
Buy
Mediflux!’

I could see that Jay, the guy beside me, was already doing just that. I nodded at the other guy and then went back to my screen to see what information might be available about this pharmaceutical company – Mediflux Inc. It was currently selling at 43
⅓
, having moved up from an opening price of 37¾. Everyone was assuming it was going to continue this upward trend, and everyone – at least everyone in the room around me – seemed to be buying Mediflux on that basis. I spent a while looking at its fundamentals –
historical
earnings, growth potential, that kind of thing – and at one point during this Jay nudged me and said, ‘How much did you buy?’